September 8, 2011
China sold 4,967 tonnes or 1.65% of 300,400 tonnes of reserve soy it offered at an auction Tuesday (Sep 6), at an average price of RMB3,980 (US$623)/tonne.
This is the first transaction for the reserve soy auction after 12 failures since March 8, according to the National Grain and Oil Trade Centre.
Compared with the import price of RMB4,400 (US$689)/tonne, the reserve soy price has obvious advantage and this is an important reason for the rise in auction volume.
The Ministry of Commerce predicted in its latest report that China's soy imports in August and September would fall from the same period of last year as low operating rate of cooking oil mills in the earlier period has caused heavy inventory of soy at ports.
As the Mid-Autumn Festival and the National Day Holiday are approaching, the edible oil market will enter a peak season. Currently, edible oil and soymeal prices are both in an upward trend, which is stimulating demand for raw materials, especially the soy.
By the middle of August, the nation's soyoil prices have rise by more than 20% over the same period of last year.
Some analyst predicted that edible oil processing mills will further raise operating rates in September and this will accelerate destocking of port soy.